Many business owners are searching for an exit strategy that will allow them to make a slow transition from their closely held business. They often want to create personal financial diversification, but are uncomfortable about giving up operational control. Potential capital gains taxes and rising income taxes are also a concern, and with tax uncertainty facing us in 2013, completing a sales transaction in 2012 may save a seller significant income taxes.
These business owners are increasingly turning to employee stock ownership plans, or ESOPs, to create liquidity from their businesses. Part of this is due to the changing merger-and-acquisition landscape after the recession and the aging of baby boomer business owners. The recently improved designs for ESOP transactions also play a substantial role.
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